Many businesses transact with customers by means of a website, inviting customers to enter into contracts for goods or services through web-based electronic communications. Private individuals may also transact in this way from time to time.

The basic principles of contract formation explained in this chapter provide the means for analysing and understanding such transactions.  As with contracts made in other circumstances, the same essential elements must exist for contracts made online: sufficient agreement; formal execution or consideration; and reaching sufficient agreement.

The following examples illustrate the way in which established concepts are applied to online transactions.